Corn Yield Estimate Causes Market Uncertainty

May 23, 2012 09:44 AM
Corn Yield Estimate Causes Market Uncertainty


USDA’s record-high corn yield estimates are causing volatility in the market as the growing season loses its "perfect" label.

Earlier this month, USDA forecasted a record high U.S. average yield of 166 bushels for the 2012-13 marketing year.
That forecast is based on the linear trend of yields from 1990 through 2010 adjusted up by 2 bushels due to the expected positive impact of early planting.
Gregg Hunt, a broker with Archer Financial Services, says the corn acres are coming in this season, no question.
But, with most of the crop barely in the ground, a lot of factors could still bring down the ambitious 166 bu./acre figure.
The phycology of the market changed after USDA released its predicted 166 bu./acre average corn yield, he says.
"Everything needs to be perfect to achieve that type of number. Anything less than perfect is going to cause excitement in the marketplace."
Dry weather in much of the U.S. and other weather issues across the globe are already causing some in the market to doubt that yield level is possible.
"The game right now is no one knows what the size of the crop is. Until we do, it’s going to be volatile."
Listen in as Hunt visits with AgDay’s Al Pell:



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Spell Check

5/23/2012 11:34 AM

  This is my 50th year of active grain farming here in Washington co. Illinois. It is simply ridiculous to predict such a high corn yield at this early stage. This week-end makes 4 weeks without measurable rainfall and the heat is yet to come. The only May we have ever had in this 50-year span that was similar was 1988. Does anyone out there remember 1988? Apparently those trading on the CBOT do not!!!​

5/23/2012 11:47 AM

  Gene -- Great comment. What do you expect average yields to be in your area?

5/24/2012 02:26 AM

  Those trading our products on the CBOT would not know the difference between a handful of corn and a handful of wheat. But we get to pay for their very existence to pull those cash prices down.


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